Why do foreign investors sell Indian stocks but chasing subscriptions?

Hello, I am Priyanka Salve, CNBC’s first correspondent in India, write from Singapore. This week, see how global funds are escaped from the Indian secondary market, but betting on Indian subscriptions.

This report is the release of this week from the “Inside India” newsletter for CNBC, which brings you a time and time in time and the market’s suspension of the emerging power. Like what you see? You can subscribe here.

The big story

India consumer focuses on technology Urban company On Wednesday, the listing was offered a snapshot of global money flowing to the country’s primary stock market.

The founders of the company, who wear blue clothes similar to a uniform and khaki pants, have taken the bell on the National Stock Exchange to start trading day. They were not the only ones who have smiles as today ended with their company’s shares rise approximately 60 % in the first time.

The celebration with them were investors from San Francisco, New York, London and Singapore, who were allocated to the shares of Urban Companes on Tuesday, with a rating of 147.90 billion rupees (about $ 1.7 billion), according to the public subscription report. In less than 10 days, the company’s evaluation jumped to $ 2.8 billion. The share allocation price was 103 rupees, and the stock was the last trading of 64 % at 169 rupees.

Enthusiasm on Urban Company is confirming a curious trend: Since 2024, foreign investors have been clear of sellers of Indian stocks in the secondary market, but they were rushing to the primary market in India, which consists of primary public offers and follow -up public offers.

Investors abroad have made 14.5 billion dollars in the primary market last year, with $ 14.4 billion in secondary markets, according to data from national securities deposits. A year away, they were two net sellers of shares worth $ 20.7 billion, but they invested a net $ 4.8 billion in the initial market.

“We have found that there is a possibility to generate alpha by participating in subscription subscriptions in subscription subscriptions,” said Hirin Dassani, chief investment official in the emerging market at White Oak Capital, which is based in Singapore, who participated in Urban Company.

For global investors, mathematics are simple. The secondary market in India appears to be exaggerated compared to other emerging markets. The MSCI India index is traded at a price rate to a profit of 25.4X compared to the emerging MSCI market index-which includes India-with P/E 15.41X ratio. The MSCI China is traded at 14.6X while the MSCI Korea index is at 12.4X.

Even the United States, which imposes a 50 % tariff on Indian exports, did not lead to any significant correction in the market, preventing investors from cheap entry.

In such a scenario, subscriptions provide better subscriptions to play for Indian markets, as departments and bankers make the problem in an attractive way, and attract great investor interests.

The revenue from the subscriptions of Indian subscriptions in 2024 was 37.1 % higher, compared to the stock market returns slightly more than 7 %, according to the Ey’s Global Trends report.

“India provides an attractive opportunity for investors, given the total background (such as GDP growth, providing a favorable population composition), a set of interesting business models, and some very high -quality management teams,” said Alexander Trevis, of JP MORGAN Management, given the total background (such as gross domestic product growth, providing a favorable population composition), a set of interesting business models, and some very high -quality management teams, “adding that there is a possible opportunity to benefit from sites in the packed markets.”

In terms of the value of the public subscription, India ranked second with companies that raised a total of 19.9 billion dollars last year, compared to 32.8 billion dollars raised in the United States. The largest in the country and in the world, the second largest public subscriptionand Hyundai Motor IndiaWhich successfully raised $ 3.3 billion in investors.

The current market situation is far from Coal India 3 billion dollars were issued for a decade contract, as it led to all local media to the liquidity crisis in the country’s banking system, including the huge recovery in investment funds from investors who are eager to invest in public subscription.

Dasani said that the ability of Indian markets to accommodate large releases may have improved, thanks to the increasing flows of local investors, adding that if foreign institutional investors can sell without any “significant impact cost”, Fiis can also invest more. The cost of influence indicates The extent of trade orders – purchase or sale – transmission of stock prices.

The fixed demand from local institutional investors deepened stock markets and improves liquidity, giving Fiis the confidence of participation in public subscriptions without worrying about falling.

Over the past 54 months, joint investment funds have witnessed net flows, as assets are run by Indian investment funds to about 850 billion dollars in June 2025 from about $ 696 billion in June 2024, according to data from the Investment Funds Association in India. Large stock markets mean greater appetite for the largest primary subscriptions, which leads to Fiis’s interest.

“In terms of subscription subscriptions, the fiscal year 2026 will be similar to the FY25, which was a record year in terms of public lists,” says Shofik Burkaysta, Managing Director of Investment in Novama. Looking at a number of major companies lining up in the listing list this year, it is expected to “rise in terms of value”.

October will witness the launch of October Tata Capital Public subscription is 2 billion dollars and a similar case of shares before The Indian follower From South Korea online, according to media reports.

Last month, Mukesh Ambani, Chairman of the Relance Board, Also, the retail seller in India, as well Plans announced To list his communication work, JIO Platforms, in the first half of 2026.

This interaction between local and foreign capital creates a virtuous cycle. Powerful local participation gives companies confidence in launching greater primary subscriptions and in turn attract foreign investors who prefer the range and liquidity.

To put everything together, foreign investors who sell in the secondary market while writing checks on subscriptions are not a contradiction, they are a strategy – and have resulted well so far.

You choose the top TV on CNBC

It seems that the employment discussions between New Delhi and Washington have taken a more positive turn as the US envoy Brendon Lynch met with Indian negotiators on Tuesday.

Anopotti Sahai, head of Economy Research at India at Standard Chartered Bank, said that there will be a steadfast impact on the path of inflation in India if New Delhi chooses to stay away from Russian oil imports.

Hazem Ben-Gacem, founder and CEO of Bluefive Capital, joined the East Access for CNBC to discuss the investment strategy of $ 2.6 billion in India and China.

You need to know

The easiest for external funds to reach the India market. The Securities and Stock Exchange Council in India simplified its bases, a step that would benefit nearly two -thirds of foreign investors. Reuters. It is also comfortable for the requirements for large public offers.

Inflation increased in India in August. the The consumer price index came 2.07 %, Analysis expectations. She said that the government increased from 1.55 % in July due to the increase in the prices of vegetables, meat, fish, oil and fat, among other things.

India faces heavy rains – but it is unlikely to increase prices. The main agricultural state of Punjab faces its worst flood 40 years, but the effect on the production of pills is limited, and there is sufficient stock Keep the food enlargement in the selectionAnalysts said.

– Yeo box ping

India Elegant 50 The index was traded by 0.12 % as of 1:20 pm local time, while 30-Stock Bse Sensex increased by 0.15 %. Indexes have gained 6.8 % and 5.5 %, respectively, so far this year.

Indian government bonds returns were traded for 10 years at 6.511 %.

Upcoming

September 23HSBC PMI Flash for the month of September, Euro Pratik sales of public subscription subscriptions

September 24: VMS TMT steel company launches public subscription

September 25: IT Services Company, Ivalue Infosology launches public subscription

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